I was inspired to write this article after attending the FOW event on 19th July on “Mobilizing Carbon Finance to Enhance Adaptation and Contribute to Climate-Resilient Agriculture.” The discussions reinforced the enormous potential that India’s agriculture and allied sectors hold in mobilizing climate finance while aligning with Article 6 of the Paris Agreement.
The strategic choice before us is not “international vs. domestic,” but how to sequence and prioritize: export only when it compounds value at home. That means leading with domestic registries, digital MRV, and farmer-first aggregation, and then selectively tapping international channels.
Why Agriculture Matters for Carbon Finance
Agriculture contributes a large share of India’s methane (rice, livestock) and nitrous oxide (fertilizers) emissions, while holding significant sequestration potential via soil carbon, regenerative practices, agroforestry, and biochar. Carbon finance can underwrite these transitions—if we align the right registry pathways with cost/time efficiency, traceability, and market demand.
The Registry Landscape
India’s agriculture can access four primary registry pathways today (and one bilateral route under Art. 6.2):
- Domestic Voluntary Registry — Carbon Registry India (CRI): India’s homegrown voluntary registry built for speed, affordability, and inclusion. It is actively integrating Digital MRV (DMRV) to deliver traceability and transparency at scale and to unlock Scope 3 insets for Indian corporates and MSMEs.
- Domestic Compliance — Indian Carbon Market / Carbon Credit Trading Scheme (ICM/CCTS): India’s compliance framework. As agriculture-facing methodologies and sectoral coverage mature, CCTS will enable obligated entities to meet targets domestically. CCTS complements CRI by creating long-run compliance demand at home.
- International Voluntary Registries — Verra (VCS), Gold Standard (GS), others: Global acceptance and brand recognition with stricter processes and higher costs/timelines. Useful where multinational buyers require specific labels.
- UNFCCC–PACM (Paris Agreement Crediting Mechanism) — the Article 6.4 Mechanism: The UNFCCC’s A6.4 crediting system issuing A6.4ERs. With host-country authorization and corresponding adjustments, these may be transferred internationally (often attracting premium demand). Without authorization, A6.4ERs can still be used for other eligible purposes.
- Article 6.2 (Bilateral) — ITMO transfers: Country-to-country frameworks that allow cooperative approaches and ITMO trades outside the central A6.4 mechanism. (Referenced here for completeness.)
What CRI and AIOI Are Building (and Why It Doesn’t Exist Today)
- Carbon Registry India (CRI) is creating a domestic issuance and retirement system aligned to Indian conditions, with DMRV-by-default (satellite, IoT, farm-gate apps, secure ledgers). It aims to lower transaction costs, compress timelines, and include smallholders, FPOs, cooperatives, and MSMEs who are priced out of international systems.
- Alliance of Indian Organic Industry (AIOI) is building the ecosystem around CRI—aggregation models, farmer onboarding, standardized practice packages (rice methane, dairy manure, fertilizer N₂O, biochar, agroforestry), capacity building, and policy advocacy. Together, CRI + AIOI are seeding a domestic carbon economy that links farmers, developers, tech providers, and buyers in a way India has not had before.
Comparative Table (basic)
| Dimension | Domestic Voluntary (CRI) | Domestic Compliance (ICM/CCTS) | International Voluntary (Verra/GS, etc.) | UNFCCC–PACM (Article 6.4 Mechanism) |
| Core Purpose | Fast, affordable voluntary issuance for Indian Scope 3/insets; farmer- & MSME-friendly | Compliance units for obligated Indian entities as coverage/methods expand | Global voluntary credits for MNCs and ESG buyers | UN-supervised A6.4ERs; option to authorize for international transfer (ITMOs) |
| Buyer Base | Indian corporates under BRSR/Scope 3, exporters, lenders; some intl. voluntary | Indian obligated entities (as sectors come under CCTS) | Multinationals, global voluntary buyers | Governments and compliance buyers; also eligible voluntary users depending on rules |
| Authorization / Adjustments | Not required (voluntary) | Not required (domestic compliance) | Not required (voluntary) | Host authorization required for international transfer; corresponding adjustments applied |
| Unit Type | Voluntary credits (domestic issuance/retirement) | Domestic compliance units (CCTS allowances/credits) | VCU/GS credits (or similar) | A6.4ERs (convertible to ITMOs upon authorization) |
| MRV & Integrity | Based on ISO14064 & LCA Integrates DMRV; accepts recognized methods adapted to Indian contexts | Government protocols; agriculture methods phasing in | Strict global methods; high cost and documentation | UNFCCC rules/DOEs; stringent reviews |
| Speed to Market | Fastest (≈6–12 months) | Medium/slow (dependent on policy coverage & methods) | Medium (≈12–24 months) | Under development |
| Cost to Develop | Lowest (India-based fees, digital workflows) | Moderate (policy/process-driven) | High (fees, audits, issuance costs) | Under development |
| MSME/Farmer Accessibility | Highest (aggregation + local support) | Medium (via aggregators; once agri covered) | Low–Medium (cost/complexity barrier) | Low (complexity, timelines) |
| NDC Interaction | Outside NDC accounting; supports domestic decarb claims | Within India’s compliance framework | Outside India’s NDC accounting | Authorization triggers corresponding adjustment (affects NDC balance) |
| Best-Fit Use Cases | Near-term Scope 3 insets, domestic ESG claims, early cash flows | Medium-term domestic compliance once agri enters CCTS | Brand-driven intl. voluntary demand; export-facing firms | High-integrity export or gov-to-govt demand; signaling leadership |
Notes: timelines are indicative and project-dependent.
Why Domestic-First Still Wins (and Then Export Selectively)
- Cost & Time Efficiency: CRI compresses time-to-issuance and lowers fees—critical for farmer cash flows.
- DMRV-Led Traceability: India’s tech stack (satellite analytics, mobile data capture, IoT) can make data verifiable at scale—reducing disputes and boosting buyer confidence.
- Ecosystem Sovereignty: A strong home market reduces dependence on international registries and avoids a perpetual pricing game. It keeps more value onshore and channels finance to rural communities.
- On-Ramp to Compliance: As CCTS coverage expands, CRI-origin projects can be adapted for compliance-grade MRV and demand, ensuring continuity rather than reinvention.
- Premium Optionality: For a subset of large, low-risk, high-integrity projects, pursue UNFCCC–PACM (A6.4) authorization or Art. 6.2 bilaterals to access premium buyers—after domestic baselines are secured.
A Sequenced Roadmap for the Next 36 Months
- 0–12 months — Domestic Voluntary First: Build a pipeline under CRI in rice methane (AWD/LLL), dairy manure-to-biogas, fertiliser N₂O efficiency, biochar, and agroforestry. Deploy DMRV and lock insetting MOUs with Indian FMCG / dairy / retail / exporters.
- 9–24 months — Prepare for Compliance:Track CCTS agri methodology rollouts; upgrade MRV and governance to compliance-ready standards. Pilot transitions for select programs.
- 18–36 months — Selective Article 6 Plays: For top-tier programs with strong additionality and permanence, seek A6.4 authorization (UNFCCC–PACM) or 6.2 bilaterals. Maintain a domestic allotment to hedge policy and price cycles.
Build the Home Market, Then Lead Abroad
The fastest way to mobilize carbon finance for Indian agriculture is to start at home: issue through CRI, prove outcomes with DMRV, aggregate smallholders via AIOI, and create reliable demand through Indian corporates and (in time) CCTS. Then, selectively elevate a portion to UNFCCC–PACM (A6.4) or Article 6.2 channels where premiums justify the added cost and time.
Unless we develop our own carbon ecosystem, it will always be a credit pricing game set elsewhere. Building India’s domestic carbon market first ensures sovereignty, resilience, and true value creation—for farmers, MSMEs, corporates, and the climate.
